Nature and function of cost keeping in a late nineteenth-century small business

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The Accounting Historians Journal Vol. 15, No. 1 Spring 1988
Thomas Tyson CLARKSON UNIVERSITY
THE NATURE AND FUNCTION
OF COST KEEPING IN A LATE NINETEENTH-CENTURY SMALL BUSINESS
Dedicated to the memory of Norman X. Dressel, a devoted accounting historian. I would also like to thank Robert Colson and an anonymous reviewer for their helpful comments and suggestions.
Abstract: J. Henry Rushton was the preeminent American builder of canoes and small pleasure boats in the late nineteenth-century. Beginning in the mid 1890s, Rushton personally maintained books of cost records and cost finding rules for his boat-building opera-tions. In conjunction with the company's product catalogs and Rushton's personal letters, these books reveal the nature and function of cost keeping for this enterprise. They also suggest that pressures from increased competition and an economic depression may have stimulated Rushton to undertake detailed costing pro-cedures.
J. Henry Rushton built canoes and other small pleasure boats in Canton, St. Lawrence County, New York between 1874 and 1906. Through a combination of high quality workmanship and aggressive catalog marketing, Rushton successfully ex-panded his business and attained international recognition. Rushton's detailed cost records and cost-finding rules reveal his concerns for the cost side of the enterprise.
This case study of the Rushton boat building business describes cost accounting practices of a late nineteenth century small business. As discussed by Chandler [1977] and Solomons [1968], costing methods such as used by Rushton were not standard management practice at the time. The archival re-cords for the case study suggest business conditions that may have stimulated Rushton to undertake such formal costing procedures as a basis for rational managerial decision making. These conditions include increased competitive pressures, market development strategies, catalog and special order pricing decisions, and profitability concerns.
Rushton's cost accounting records were maintained in two volumes he kept himself, in a labor operations record book kept